Effect this measure will have on costs and revenues of state government.

The purpose of this bill is to create a drug testing program for applicants and recipients of temporary assistance for needy families (TANF) cash benefits. Any applicant or recipient who fail an initial drug test will be required to pass a second drug test in the following thirty to sixty days to maintain eligibility for or recipients of these benefits. Failing the secondary drug test results in ineligibility for benefits for a period of two years, and requires a mandatory drug test as part of a reapplication for benefits. The bill provides for a substance abuse treatment program. The bill provides for protective vendor or vendor payments to a third-party payee for the benefit of the members of the household. The bill also ensures confidentiality of records.
Total estimated cost for the first year of this program would be $1,181,300 and subsequent years would be $448,159 recognizing first time costs of testing all current participants.

Fiscal Note Detail

Over-all effect

Effect of Proposal

Fiscal Year

2013Increase/Decrease(use"-")

2014Increase/Decrease(use"-")

Fiscal Year(Upon FullImplementation)

1. Estmated Total Cost

0

1,181,300

448,159

Personal Services

0

0

0

Current Expenses

0

1,181,300

448,159

Repairs and Alterations

0

0

0

Assets

0

0

0

Other

0

0

0

2. Estimated Total Revenues

0

0

0

3. Explanation of above estimates (including long-range effect):

The Department of Health and Human Resources' Bureau for Children and Families would be involved with the drug testing related to the welfare (TANF) program. The average number of families that received TANF was 10,785 for FFY 2012 (October 1, 2011 - September 30, 2012) as included in the LOCHHRA report. The current contract for drug testing is $56.50 per drug test, therefore it would cost $609,352 (10,785 X 56.50) to test these adults for the first time.
The bill states if a person fails the initial test, a second test will be required. Utilizing a fail rate of 6.5%, an additional 701 (10,785 X .065) tests would be required. Therefore, the cost would be (701 X 56.50) = $39,607.

The fail rate of 6.5% of TANF recipients is based on illicit drug use data from the 2010 National Survey on Drug Use and
Health: Summary of National Findings.
Estimated cost related to required system changes to the Department's RAPIDS system (eligibility system) to accommodate requirements of the proposed legislation total is $532,341. This estimate is based on data from the Department's contractor for the RAPIDS system indicating an approximate 3,956 hours of programming time @ $130 = $514,280. Additionally, it is estimated that gathering policy requirements and testing system changes required by Department staff would equate to 1,088 hours @ $16.60/hr = $18,061.
The total estimated ongoing cost is $448,159 ($294,930 + $121,871 + $19,154 + $12,204). There are an estimated 435 new cases per month (435 x 12 x $56.50) = $294,930 in future years. Utilizing a scenario for random drug testing of 20% of caseload, there would be 2,157 (10,785 x 20%) random tests done per year which equates to $121,871 (2,157 x $56.50). Utilizing the fail rate of 6.5% for new elgibles, an additional 339 (5220 X .065) tests would be required. Therefore, the cost would be (339 X 56.50) = $19,154. Also, if another individual is designated to receive benefits for a minor child, they will also have to be tested at a rate of $56.50 per drug test; estimating 2% of cases will have a designee there would be an additional cost of $12,204 (216 X $56.50). If this designee fails the drug test then further testing must be completed.

Memorandum

The proposed legislation does not define the percentage of the recipient population that will be randomly drug tested or frequency to which the testing is to occur, below is an example of costs based on a scenario of testing 20% of caseloads.
The above estimates for new eligibles is based on the average number of new approved cases, rather than the number of applications (21,283 for SFY2012) as it is assumed there would be no need to test those not eligible for the benefit.
A variety of federal courts around the country have struck down similar laws: AFT WV, AFL-CIO v. Kanawha County Board of Education (West Virginia), Marchwinski v. Howard (Michigan) and Lebron v. Wilkins (Florida).
The proposed legislation does not clarify the fiscal responsibility of the drug treatment program that applicant/recipient is eligible to enroll in as to not be denied benefits. The estimated costs for an Intensive Outpatient Program lasting 6 weeks (minimum of 30 days of treatment) is $4,500/person. This cost is not reflected in the fiscal note cost estimate.
There is vagueness regarding who is responsible to pay for the drug testing, does the State pay except in instances pertaining to retesting after a drug treatment program has been completed (Section 2 under (f) Reapplication following ineligibility)?

Additionally, probable cause testing is not included in the above estimate.

Technical Flaw - proposed legislation refers to the ""Commissioner of the Division of Human Services"", the organizational structure of the Department is that of a department level Secretary and Commissioners of Bureaus, including the Commissioner of the Bureau for Children & Families where the TANF program is adminstered."